Health-Care Crisis

In America, we treasure the freedom to care for ourselves and our families as we see fit. But the ever-escalating costs of health care — and the shrinking number of employers that provide coverage — are chipping away at that freedom, and shaking the confidence that you can protect your family's health, in wellness and in illness. Here's what you can do about it.

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BEFORE DINNER MOST NIGHTS, Cheryl Gorham works out in her garage — 30 to 60 minutes on the elliptical trainer or stationary bike, or she does squats with free weights, and crunches. On weekends she walks on the beach or hikes in the mountains near her home in Santa Cruz, CA. She rarely has a cold and can't remember the last time she took a sick day from work.

So Cheryl was stunned last year when she applied for an individual health plan and got turned down. "I'm young, I'm healthy, I don't smoke," says the 42-year-old. "I never thought I'd have a problem getting insurance."

The real shocker was why she had a problem. The insurance company cited preexisting conditions, namely uterine fibroids and "infertility with consultation/treatment." This wasn't entirely accurate. Cheryl had experienced bleeding from fibroids while on birth control pills three years earlier — but the bleeding stopped when her doctor took her off the Pill. As for infertility, Cheryl had never been diagnosed, much less treated. She had recently told her ob/gyn she was trying to get pregnant, with no success. He'd sent her for a hormone test, which came back normal. But the simple fact that he'd scribbled a referral made Cheryl uninsurable.

"I had no idea that anything you tell your doctor can wind up hurting you," she says. "Is this really happening in America?"

It's no news flash that our health-care system is in trouble. The United States has the highest per capita health-care spending among industrialized countries — $5,635 in 2003, almost two-and-a-half times the average for other nations. Every day brings headlines about the soaring costs of treatment and the plight of the 45 million Americans — one in six — who have no insurance. Presidential hopefuls promise vague solutions. Congress considers legislation to give coverage to the 9 million children who don't have it. Leading businesses, and even the insurance industry, which famously and furiously fought reform during the last big push in 1994, have called for change. Everyone recognizes that the current system is a mess and getting worse.

But there is no broad consensus on how to fix it. Force insurers, drug companies, hospitals, labs, and doctors to cut prices? Provide tax breaks to encourage people to buy insurance? Require every American to buy it, the way we are required to carry insurance for our homes and cars? Or eliminate health-insurance companies altogether and set up a government-run system like England's or Canada's? Any major change will involve a huge political battle, and so far the federal government has been happy to sidestep the issue. Massachusetts recently initiated a plan to insure nearly every resident, and at least a dozen other states are considering health-reform legislation, but in most places change is slow to come.

Like Cheryl Gorham, more and more people are discovering that the health-care mess really is happening in America — and it's happening to them. "People are very angry," says Byllye Avery, founder of the Avery Institute for Social Change and the Black Women's Health Imperative. "There's a growing awareness that health care is — or should be — a basic human right."

Increasingly, this is a problem for the middle class, not just the underemployed. Seventy-four percent of people without insurance are part of working families; sometimes they can't afford their employer's health plan (employee premiums have skyrocketed 74 percent since 2000) or their job doesn't provide benefits. Only 60 percent of employers offered health insurance in 2005, down from 69 percent five years earlier, according to the Kaiser Family Foundation and the Health Research & Educational Trust. And buying a plan on your own is close to impossible. A study by the Commonwealth Fund found that nearly nine out of 10 people who tried to do so either couldn't pay the premiums or were rejected.

Employer-sponsored plans are prohibited from dropping people when they get sick or excluding anyone because of a past medical problem. But in most states, those consumer protections don't apply to individual policies. Women, in particular, suffer. We're more likely than men to work in part-time, retail, or service jobs without benefits. If we're a dependent on our spouse's plan, we're vulnerable in a divorce — 26 percent of single moms are uninsured, the Kaiser Family Foundation estimates. We use health-care services more than men, and we often handle the family finances — so we're the first to see how a serious illness can ravage them. Medical expenses are the reason cited for half of all personal bankruptcies.

"Uninsured folks are just like everyone else," says Sarah Penna, a hospital social worker and an activist with the Maryland Health Care for All! Coalition, a grassroots advocacy group. "They have jobs. They live in your neighborhoods. They shop at your grocery store." As part of a push for state reform, Penna recently documented the struggles of Maryland's uninsured. "This is not an issue of poverty. It's an issue for everyone."

Diana and Steve Lowe never thought twice about spending money on their kids — toys for their little boy, trendy clothes for the two teenage girls, field trips, vacations, birthday parties. "If they wanted something, they got it," Diana says. But everything changed when Diana was diagnosed with breast cancer three years ago at age 40.

"I couldn't work, going through surgery and chemo," says Diana, who had a background as a project manager for a medical insurance research company before the diagnosis. "I was in pain, and my memory was gone." The family struggled on Steve's salary as a roofer and shelled out about $30,000 for Diana's medical bills: $2,000 annual deductibles; copayments for blood tests, bone scans, checkups; and huge drug costs, which her insurance covered only in part. As badly as she suffered physically, the economic pain hurt Diana even more, because it affected her whole family. "It drained our finances completely," Diana says.

More than two years later, the Lowes are still paying the price. Diana, who now works as a waitress, used to take the kids to Las Vegas once a year to see her mom. No more. She also couldn't pay for yearbooks for her daughters, Angela, 17, and Brittney, 14. She did manage to buy Angela a dress for her junior prom — at a thrift store.

But the family had to cut more than just frills. They could no longer afford their $1,000-a-month family health plan. Diana obviously needed insurance, and Steve did too because of some existing medical problems and the physical risks that come with his job. Canceling the kids' policy saved $600 monthly — so they did it. But now Diana lives in constant anxiety and dread.

The girls are healthy. But gym class, soccer practice, driving with a friend's mom — the most ordinary routines become ominous when your kids are uninsured. "Every day I think, Oh, my God, what if something happens to them at school?" Diana says. "What am I going to do if they get hurt?" The worst part is that she can't pay for the things that would protect their health: annual checkups, a meningitis vaccine for Angela, and HPV shots for both girls. "It's awful," Diana says. "But I have no choice. Or I do — but it's not cut-and-dried and simple. Do I feed my kids or give them medicine? Do I give them medicine so they can starve? Do I pay for something that's preventive and may protect my child in the future or do I pay for treatment for the child who has trouble now?"

That child is Tyler, 6, who has asthma. Diana managed to stash away some of his medicine while he still was insured. But the supply is dwindling, and soon they'll have to pay about $100 a month. And that's on top of other necessities. "My son had a growth spurt and he's wearing clothes that are too small for him," she explains. "It's very frustrating. By the time I can afford to buy him clothes, he's going to need to see a doctor." She doesn't know how they'll handle it all, only that they will.

Michelle moved from New York City to a suburb of Baltimore three years ago, looking for a tranquil, safe place to raise her two younger children. She found it. "You don't hear gunshots at night," she says of her new neighborhood. "You don't hear anything."

The single mother found work, too, as a case manager at a center for brain-injured adults. The salary wasn't great: $36,000 a year. Her rent would gobble half her take-home pay. But the job had a good benefits package, including health insurance, and she felt confident she'd be able to make ends meet.

Then she read the fine print and realized how much she'd have to pay for that insurance. "All the jobs I've had until now had excellent benefits," she says. "I paid almost nothing for insurance. But the medical coverage here is outrageous. I'd have to pay around $170 every pay period, just for me, with a $500 deductible. For the family, it's over $200 a pay period. I'm not a sick person, and that's a lot of money." She turned down the coverage.

Her son and daughter, ages 15 and 11, qualified for Maryland's health-insurance program for low-income children. But she wasn't able to find a comparable program for adults, so Michelle enrolled in REACH, a county-run program that provides discounts on doctor visits, lab work, prescriptions, and hospital stays.

REACH — Residents Access to a Coalition of Health — is a model effort to make medical care available to the uninsured. Since its establishment in 1999, the program has served nearly 6,000 Anne Arundel County residents, says Elin Jones, a public information officer for the Department of Health. But REACH isn't insurance; area doctors agree to see REACH patients for a nominal fee.

"An insurance card gives you dignity," says Glenn Schneider, executive director of the grassroots reform group Maryland Health Care for All! Coalition. "You walk in, you get what you need. REACH is a safety net. Is it good? Absolutely. But you're at the mercy of providers who are busy and stressed themselves."

Michelle says the county referred her to a gynecologist who squeezed in REACH clients only when regular patients canceled appointments; it took weeks of phone calls for Michelle to get in. She had an easier time booking a checkup with a general practitioner but was disappointed with the care. She says she told the doctor she had a family history of diabetes and that her New York physician had recommended an extensive workup. But the new doctor ran only a simple blood test, said her sugar was a little high, and advised her not to worry. Maybe he would have done the same for a patient with insurance, but Michelle couldn't help wondering, Did he brush me off because I'm a charity case?

Michelle is angry and frustrated that health care has become a luxury beyond the means of a working single mom. "It's really unfair. I'm not sitting on my butt, asking for public assistance," she says. "I'm out there trying to do something. It seems so wrong that I work hard every day and I'm still in this position."

Sandy Flanigan once chased the Hollywood dream. She was a talent manager; her husband, Steve, was an actor. But living in L.A. gave them "a heart for broken people," Sandy says, and Steve quit show business to attend Bible school. About 12 years ago, the couple founded Hope Center, an interdenominational ministry in an impoverished neighborhood in Nashville. Sandy became an ordained pastor, working with single moms, drug addicts, prostitutes, and street kids. She wanted the church to serve as a beacon in a bleak landscape. Now, as she battles cancer without health insurance or the treatment that could save her life, the church represents a beacon for her as well. "This is where I have to rest my hope now," she says.

In 1999, at age 41, Sandy was diagnosed with acute lymphocytic leukemia. Her doctor told her she had no more than three months to live, and her insurance company promptly raised her monthly premiums to more than $2,000 — impossibly close to the family's monthly income. Sandy found a doctor willing to try aggressive treatment and then scrambled for a way to pay for it. After considerable hassle and anguish, she was accepted into TennCare, Tennessee's program for the uninsured.

Over the next four years, Sandy got chemotherapy and immunoglobulin treatments to boost her immune system. The expense was staggering — six months of treatments alone ran as high as $46,000, plus there were doctor bills, body scans, lab charges, medicines, vitamins, and special foods. Although TennCare paid most of the costs, the Flanigans shelled out thousands of dollars for uncovered expenses. Sandy sold her jewelry, car, and dining room set. She and Steve cashed in annuities and, as a last resort, the children's college funds. "The last thing we have not sold is our house," she says.

Still, Sandy considered herself lucky. After years of budget deficits and mismanagement, the state restructured TennCare, cutting off hundreds of thousands of people. Sandy knew patients older and sicker than she who'd lost coverage. But so far, she still had it.

Then, in December 2005, she suffered an aortic aneurysm and underwent emergency surgery. While in the hospital, she received her TennCare termination letter. The reality hit her hard. "There are moments when I could just cry, I feel so overwhelmed," she says.

She appealed — and lost. She couldn't get the aortic-valve replacement her cardiologist said she needed, and she had to stop chemotherapy mid-treatment. The family saved every penny they could just so Sandy could get tests to monitor her health. "The place I'm at now, it would make you crazy if you thought about it a lot," she said last fall. "But this is the situation. I'll just live my life and not the disease."

In December, she went for her heart follow-up — six months late. The doctor saw her for free, and Sandy charged the $2,000 in lab tests on her credit card. The good news: Her faulty heart valve hasn't gotten worse. But the cancer has. Over Christmas Sandy discovered sores in her mouth, a signal of weakening immunity. She developed flu-like symptoms she couldn't shake, another ominous sign. She and Steve called the state, pleading for help. To their surprise and relief, Sandy got approval for a single treatment of chemotherapy and immunoglobulin.

She received that treatment this past winter, but blood tests showed that her cancer has advanced dramatically since then. Her doctor told her that unless she resumes full therapy soon, she could become untreatable.

Sandy struggles to remain upbeat. "I've got a life," she says. "I can't let this disease get to me." What gets to her is how thoroughly her illness has shattered her family financially. What gets to her is the fact that she worked all her adult life and always carried health insurance, yet she can't obtain the care that might keep her alive. What gets to her, probably most of all, is the knowledge that her predicament isn't unusual. "I don't care who you are and what you own," she says, "you're one diagnosis away from being where I am."

Cheryl Gorham used to work long days as a product manager for an electronics firm, then come home and do the books for her husband's paint-contracting business. Finally, she decided to leave her job and manage the family business full-time.

She had reservations — would they make enough money and also get along as partners? But one thing she never worried about was health insurance. She and her husband, Eddy, had been covered through her employer, and under a federal law, COBRA, they could keep that insurance for 18 months. Beyond that — well, Cheryl didn't worry about it. They were young and healthy; of course they'd get insurance.

But then they found out how much COBRA cost: $852 a month initially, and then $1,000. "I may have stayed on at my job if I'd known it was going to be such an issue," Cheryl says.

They applied for a cheaper plan, but were rejected because of preexisting conditions. Cheryl's denial letter cited fibroids — but the problems associated with them had cleared up quickly a few years back — and infertility, which had never actually been diagnosed. Her doctor had once ordered a hormone test when Cheryl said she was trying to get pregnant, but the results were normal.

Eddy applied to another insurance company on his own, and easily got coverage. But Cheryl was stuck — and scared: What if she got pregnant while uninsured? Although it seemed insane that an insurance hassle could determine such an important — and private — decision, Cheryl and Eddy stopped trying to conceive.

Over the next six months, she made countless phone calls, filled out paperwork, gathered records from her doctor, and got sign-offs from her former employer, trying to get insurance under another federal law, HIPAA, which kicks in after COBRA runs out. HIPAA finally came through in late 2006, but because it provides only bare-bones coverage, Cheryl continued to look for a new plan — and put off trying to get pregnant until she found one.

"It makes me angry," says Cheryl. "I would like to have been pregnant last year. The older I get, the harder it's going to be. But I can't do it until the insurance issue is settled. It frustrates me that insurance companies have so much power over our lives."

The STATES of Insurance

Which states make the health-care grade?

• MINNESOTA has the lowest rate of uninsured adults: only 8 percent.

•More than 30 percent of TEXAS adults are uninsured — the highest of any state.

• MASSACHUSETTS, MAINE, and VERMONT have goals of near-universal health-care coverage for all residents. Their low-cost plans are for lower-income households and those without an employer-sponsored plan. Massachusetts imposes monetary penalties on businesses that don't offer coverage. Only in Massachusetts is buying insurance mandatory — people who don't comply are penalized by about $200 initially, and larger fines later.

• ILLINOIS provides affordable coverage for children. Under its "All Kids" plan, parents who don't have coverage for their kids and don't qualify for other state programs pay about $40 a month for comprehensive care for a family of four with an income of between $40,000 and $59,000 per year.

• RHODE ISLAND mandated that its private health-insurance companies create affordable plans for small businesses. The average yearly premium is between $309 and $322.

• CALIFORNIA's governor has introduced a plan to offer coverage to the 6.5 million California residents who don't have insurance, including about 1 million illegal immigrants.

What's Our Government Doing?

Individual states are testing ways to provide affordable health care but will need help from the federal government to create lasting change. Here's what some of the political bigwigs propose:

•TAX BREAKS FOR PRIVATELY INSURED PEOPLE:
President George W. Bush wants to end the predominance of employer-sponsored insurance programs by offering significant tax breaks to people who buy their own plans as well as penalizing those who opt for their employer's coverage if it's worth more than $15,000. The money raised by a tax levied on employer-sponsored plans would help subsidize private plans, making them more affordable. These tax breaks and hikes would not only give consumers an incentive to buy individual insurance but also would create competition between insurance companies, which would be selling coverage directly to consumers.

•TAX PENALTIES FOR COMPANIES THAT DON'T PROVIDE HEALTH CARE:
Former Senator John Edwards, a Democrat, is the only presidential candidate who's laid out a specific health-care plan so far. He proposes giving tax credits to the uninsured and subsidizing the cost of insurance for those without employer-sponsored coverage by eliminating tax cuts for those earning over $200,000 and taxing employers who don't offer plans. Under his proposal, purchasing health-insurance coverage would be mandatory.

•LARGER SALARIES AND MANDATORY PRIVATE INSURANCE:
Ron Wyden, a Democratic senator from Oregon, has introduced a health-care reform bill to the Senate that would end employer-sponsored insurance. Instead, companies would convert what they would have spent on each employee's benefits into a larger salary, which employees could then use to buy mandatory health-care coverage. This puts you — and not your employer — in charge of your health care. And since companies currently get billions in tax cuts for offering insurance plans, the federal government could use that extra money to subsidize insurance plans directly.

Is Your Health Insurance Enough?

How to make your coverage work for you and your family.

•GET MORE FOR YOUR MONEY. If you don't have employer-sponsored insurance, increase your deductible to reduce monthly premiums and apply for a Health Savings Account, says Kim Lankford, author of The Insurance Maze. Money contributed to this account is tax-free when spent on medical expenses. (Go to hsafinder.com to see if you're eligible.) Even if you do have an employer-sponsored plan, shop around for different coverage for your kids. States and private companies are adding options for children's insurance, so while it's unlikely that you'll find a cheaper plan for yourself than what your employer offers, you might have better luck finding coverage for your children. And since the average annual premium for a family of four was $11,500 in 2006, compared to only $4,200 for an individual, you'll save money if you can deal with the extra hassle.

•GET COVERAGE EVEN IF YOU'VE BEEN DENIED. If you have a chronic disease, says Lankford, find out if your state has a high-risk pool — money the state sets aside to subsidize insurance for sick people who've been denied coverage. (Visit the National Association of Insurance Commissioners Website at naic.org to find your state's insurance office.) You could also hire an independent insurance agent, who will help you find the most affordable option available. (Find an agent through the National Association of Health Underwriters at nahu.org.) If all else fails, appeal to your state's insurance commissioner directly (you can find his or her number at your state's Insurance Department website), says Pat Schoeni, executive director of the National Coalition on Health Care. As the state's highest insurance authority, the commissioner may be able to intercede on your behalf.

•GET COVERAGE EVEN IF YOU'VE BEEN LAID OFF. After your COBRA plan runs out (usually 18 months after your job's been terminated), your insurer is obligated to offer you the same coverage (at your own expense) regardless of your health, according to the federal Health Insurance Portability and Accountability Act (HIPAA). This is mostly beneficial to people with preexisting health conditions because your insurer can't deny you your previous coverage even if you've been laid off. It'll be expensive, but the plan will likely cost less than paying in full for treatments. But don't delay: Lapsing for even six weeks can make you ineligible.

Stemming the Crisis: What You Can Do.

•GET INFORMED. Visit your governor's Website to see if he or she has prioritized reforming health insurance. If you can't find information there, check out the National Conference of State Legislatures (ncsl.org) for up-to-date information on which states have proposed health-insurance legislation and what has passed so far in 2007. The Commonwealth Fund (cmwf.org) also has a quarterly States in Action online newsletter that outlines the most recent state health-insurance changes and initiatives.

•MAKE YOUR VOICE HEARD. Your state's governor, senators, and representatives want to know what matters to you. Find their contact information at vote-smart.org and then pick up the phone, write a letter, or send an e-mail — maybe even all three — outlining your concerns. Don't be afraid to get personal — individual citizens are getting hurt, and that's a powerful reason for change.

•STAY INVOLVED. There are many nonprofit organizations dedicated to health-care reform such as CodeBlueNow! (codebluenow.org) and Health Care for All (for local groups type "Health Care for All" in your search engine).

Health-Insurance Glossary

These terms will be tripping off of every pundit's and candidate's tongue come campaign season. Here's what you'll hear and what it all means.

•DEDUCTIBLE: The amount of money for medical services that the patient is responsible for paying each year before her insurance kicks in.

•HIGH-DEDUCTIBLE POLICY: Under this type of coverage, you are responsible for all medical costs up to at least $1,100 (or $2,200 for a family). The most extreme high-deductible plan is called catastrophic insurance, where you're responsible for up to as much as $35,000 before insurance kicks in.

•HIGH-RISK POOL: Many states (about two thirds) have money reserved for people who, because of preexisting conditions, have been excluded from coverage or are charged prohibitively expensive premiums.

•INDIVIDUAL MANDATE: A law that requires everyone to buy health insurance.

•MANAGED CARE: The system under which many Americans are insured now, in which a private insurance company contracts with doctors and hospitals for services. The insurer dictates the terms of service and which doctors you can visit, while you (and often your employer) pay a monthly fee for that health care.

•MEDICAID: Federal-and-state-funded health insurance for people with low incomes. A family of four making an annual salary of less than $20,650 usually qualifies for Medicaid; an individual must typically earn less than $10,210.

•PREEXISTING CONDITION: Each insurance company defines this differently. It generally means an illness or injury for which the person has already sought medical care and which can be used to deny coverage.

•PREMIUM: The periodic amount you pay for health-insurance coverage.

•SINGLE-PAYER SYSTEM: A system in which one source — the government — pays for the entire country's health care using tax revenues from individuals and employers. We currently use a multipayer system — employers, individuals, and, in some cases, the government assume costs.

•SOCIALIZED MEDICINE: Health care provided and paid for entirely by the government.

•UNCOMPENSATED CARE: Health care provided to the uninsured. This includes unbilled charity care and patients' unpaid medical bills. In 2005, the average family was charged $922 more in premiums for employer-sponsored coverage to offset the costs of uncompensated care.

•UNIVERSAL HEALTH CARE: Coverage for every American, regardless of how the system is financed.